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Answering a question whether the FLS platform could be used for further growth into the LNG sector during Ocean Yield’s Q2 earnings call on Tuesday, Rode said “that is clearly an ambition, and also a possibility.”
“This is NYK’s vehicle for long-term LNG charters in Europe and hopefully that setup can be used for further growth,” he said.
“I could say that so far we are extremely pleased and impressed by not just NYK but also Geogas, and we share sort of same views when it comes to terms as well as risks etc.,” Rode said.
Rode said this is a “landmark” transaction for Ocean Yield and “we are pleased to have found a transaction within the LNG segment that meets our risk, reward, and return requirements.”
FLS is a 50/50 joint venture between Japan’s NYK and France’s Geogas LNG, a firm jointly owned by CVC DIF, Access Capital Partners, and Geogas Maritime.
Ocean Yield agreed to purchase infrastructure fund CVC DIF’s share in Geogas LNG, providing an indirect economic interest of up to 34 percent in FLS
CVC DIF will sell its interest in FLS, held through its CIF I and CIF II funds.
In November 2019, the CIF I fund closed an investment to finance an initial batch of five newbuild LNG vessels through FLS.
In 2021 and 2022, the CIF II fund also invested in FLS to finance the acquisition of Gazocean, a French ship management company which has operated LNG vessels for more than 60 years, and the addition of three more vessels.
Closing of the transaction is subject to conditions and is expected to take place in the second half of 2024.
FLS LNG carriers
FLS owns a fleet of 12 LNG vessels, with six vessels already on the water with an average age of three years, Rode said.
Further two vessels will be delivered in 2024 and 2025, while four additional newbuildings are expected to be novated to FLS at or around closing of the transaction and will be delivered in 2027.
All vessels are employed on long-term charters to three European investment-grade companies.
The 174,000-cbm LNG carriers owned by FLS include the 2020-built, Elisa Larus, and the 2022-built, Elisa Aquila, both chartered by units of French state-owned utility EDF.
EDF will also take on charter two LNG newbuilds.
On the other hand, French energy giant TotalEnergies took on charter four 2021-built vessels and these include LNG Adventure, LNG Endeavour, LNG Endurance, and LNG Enterprise.